ALMEGA PAINTS PVT LTD., MUMBAI V. DY CIT 15 (1)(1), MUMBAI

ITA 6785/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5468 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-11-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR
• Keywords: Unexplained cash credit; Unexplained expenditure; Search and seizure; Corroborative evidences; Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , A MUMBAI BEFORE : SHRI C.N. PRASAD, JM & SHRI M.BALAGANESH, AM ITA NO. 6785/MUM/2019 ( ASSESSMENT YEAR : 2011 - 12 ) M/S. ALMEGA PAINTS PVT. LTD., B - 24, MINERVA INDUSTRIAL ESTATE, OFF. P.K.ROAD M ULUND WEST MUMBAI 400 080 VS. D CIT 15(1)(1) R.NO.470, 4 TH FLOOR AAYAKAR BHAVAN M.K.ROAD MUMBAI 400 020 PAN/GIR NO. AAHCA3698N (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI SATISH MODY REVENUE BY SHRI BRAJENDRA KUMAR DATE OF HEARING 10 / 05 /202 1 DATE OF PRONOUNCEMENT 17 / 05 /202 1 / O R D E R PER C.N. PRASAD (J.M): THIS APPEAL IN ITA NO. 6785/MUM/2019 FOR A.Y. 2011 - 12 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 24 , MUMBAI IN APPEAL NO. CIT(A) - 24/ DCIT - 15(1)(1)/IT - 219/2018 - 19 DATED 02/08/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 24/12/2018 BY THE LD. DY. COMMISSIONER OF INCOME TAX - 15(1)( 1) , MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 6785/MUM/2019 M/S. ALMEGA PAINTS PVT. LTD., 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE IN THE SUM OF RS.11,72,434/ - ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S.68 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF PAINT AND PROCESSING RAW MATERIALS. THE LD. AO OBSERVED IN THE ASSESSMENT ORDER THAT AS PER INFORMATION AVAILABLE ON RECORD, IT SHOWED THAT ONE SHRI SANJEEV KUMAR SINGH IS AN ENTRY OPERATOR AND HAD PROVIDED VARIOUS BOGUS ACCOMMODATION ENTRIES FOR COMMISSION THROUGH HIS ERSTWHILE COMPANIES / PARTNERSHI P FIRM S AND PROPRIETORSHIP CONCERNS. THE LD. AO OBSERVED THAT ASSESSEE HAD PROVIDED ACCOMMODATION ENTRIES OF RS.11,72,434/ - . IN THIS BACKGROUND, THE CASE OF THE ASSESSEE WAS REOPENED U/S.147 OF THE ACT. DURING THE COURSE OF RE - ASSESSMENT PROCEEDINGS, THE A SSESSEE HAD CATEGORICALLY DENIED HAVING MADE ANY TRANSACTION WITH SHRI SANJEEV KUMAR SINGH . THE LD. AO DID NOT CONSIDER THIS REPLY OF THE ASSESSEE AND PROCEEDED TO MAKE ADDITION OF RS.11,72,434/ - ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S.68 OF THE ACT ON T HE GROUND THAT ASSESSEE HAS PROVIDED ACCOMMODATION ENTRIES. THIS ACTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). 3.1. AT THE OUTSET, WE FIND THAT THE REVENUE HAD NOT BROUGHT ANY EVIDENCE ON RECORD AS TO WHO SHRI SANJEEV KUMAR SINGH IS AND HOW HE IS CON NECTED WITH THE ASSESSEE HEREIN. THE PRIMARY ONUS HAS BEEN DULY DISCHARGED BY THE ASSESSEE BY STATING THAT HE DOES NOT KNOW WHO SHRI SANJEEV KUMAR SINGH IS AND ASSESSEE HAD ALSO SPECIFICALLY STATED IN WRITING THAT THERE ARE NO BUSINESS DEALINGS WITH SHRI S ANJEEV KUMAR SINGH. WHILE THIS IS SO, THE PRIMARY ONUS HAS BEEN DISCHARGED DULY BY THE ITA NO . 6785/MUM/2019 M/S. ALMEGA PAINTS PVT. LTD., 3 ASSESSEE, THE ONUS SHIFTS BACK TO THE LD. AO WHO IS DUTY BOUND TO PROVIDE ALL THE NECESSARY EVIDENCES / MATERIALS THAT ARE AVAILABLE WITH HIM VIS - - VIS THE ASSESSEE THER EON AND CONFRONT THE ASSESSEE WITH THOSE EVIDENCES, IF ANY, LINKING THE ASESSSEE . ADMITTEDLY, WE ALSO FIND THAT ADDITION HAS BEEN MADE BY THE LD. AO TOWARDS UNEXPLAINED EXPENDITURE U/S. 68 OF THE ACT. AS PER THE PROVISIONS OF THE ACT, THE UNEXPLAINED EXPE NDITURE WILL GET TAX ED U/S.69C OF THE ACT AND UNEXPLAINED CASH CREDIT WILL GET TAX ED U/S. 68 OF THE ACT. THE REQUIREMENT OF THESE TWO SECTIONS ARE TOTALLY SEPARATE AND DISTINCT. MOREOVER, THE LD. AO HAD ALSO OBSERVED IN HIS ASSESSMENT ORDER THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION CONDUCTED IN THE CASE OF SHRI SANJEEV KUMAR SINGH U/S.132( 1 ) OF THE ACT, IT WAS FOUND THAT HE WAS AN ENTRY OPERATOR AND HAD PROVIDED BOGUS ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES FOR EARNING COMMISSION INCOME THR OUGH HIS ENTITIES . NOWHERE IN THE ASSESSMENT ORDER, THE LD. AO HAD BROUGHT ON RECORD WITH SUPPORTING EVIDENCES THAT WHETHER THE ASSESSEE HAD RECEIVED ANY LOANS OR HAD RECEIVED ANY ACCOMMODATION BILLS FROM SHRI SANJEEV KUMAR SINGH. IN FACT , THE NATURE OF TR ANSACTION TO THE TUNE OF RS. 11,72,434/ - IS ALSO NOT MENTIONED IN THE ASSESSMENT ORDER ; WHETHER TH E SAME IS PAYMENT OR RECEIPT IS ALSO NOT DISCERNIBLE FROM THE ASSESSMENT ORDER. WHEN ALL THESE POINTS WERE DULY POINTED OUT BEFORE THE LD . CIT(A), WE FIND THAT THE LD. CIT(A) HAD NOT EVEN BOTHERED TO ADDRESS ANY OF THE ISSUES BUT MERELY RELIED ON VARIOUS CASE LAWS THAT ARE TOTALLY IRRELEVANT TO THE FACTS OF THE ISSUE AND PROCEEDED TO CONFIRM THE ADDITION MADE THEREON. 3.2. IN VIEW OF THE AFORESAID OBSERVATIONS, WE HAVE NO HESITATION IN DELETING THE ADDITION MADE IN THE SUM OF RS.11,72,434/ - AS THE SAME WAS MADE WITHOUT ANY BASIS AND MERELY ON SURMISES AND JUNCTURES. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. ITA NO . 6785/MUM/2019 M/S. ALMEGA PAINTS PVT. LTD., 4 4. IN THE R ESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 17 /05/2021 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( M.BALAGANESH ) SD/ - ( C.N.PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED 17 / 05/ 202 1 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//